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Zac Ziegler: I'm Zac Ziegler, and you're listening to Oregon rainmakers from KLCC. On this edition, I talk with Jamie Floyd, co-founder of Ninkasi Brewing Company, about the state of craft beer.
Last month was a shocking one for the Oregon craft brewery community. Rogue Ailes, an early pioneer of craft beer, unexpectedly shut down after nearly four decades. While details continue to emerge regarding that company's issues, it has prompted many to discuss the craft beer industry itself. Craft beer sales were down in 2024 according to trade group the Brewers Association and craft beer, share of beer sold also dropped. Industry experts say the slight decrease has been a sign of a maturing industry, but that maturation has led to several brewery closings nationwide. So what's it like to be an industry leader right now? That's what I wanted to find out from Jamie Floyd, one of the founders of Ninkasi Brewing Company, the second largest brewery in Oregon and the 28th largest craft brewer in the nation. And Jamie was nice enough to offer to show me around Ninkasi facility in Eugene's Whiteaker neighborhood, so we could talk not just about the industry, but also about what goes into making one of the world's oldest beverages.
Jamie Floyd: Right now we're inside the pilot brewery for our facility here in the Whiteaker in Eugene, Oregon. We have a five barrel test batch system in here that me and a few people operate to make small special beers work on new projects for larger releases. This is kind of where the innovation side is.
Ziegler: Yeah, this is where the fun play happens.
Floyd: Exactly.
Ziegler: So how are things going for Ninkasi?
Floyd: Right now, you know, things for Ninkasi are actually going fairly well. We're actually up as far as like data goes, both as Ninkasi as well as great frontier beverages, which is also has Ecliptic Brewing, which started out of Portland as a part of our collective and we just onboarded Inclined Cider as well. So we've been able to work with a few other people in partnership to keep this brewery running at the capacity it was built for.
Ziegler: How are you feeling about just the Oregon beer world right now, or also kind of the national picture on things
Floyd: Beer as a category has been down in the United States for a very long time, and then when the craft sort of revolution happened that allowed for certainly the craft portion of beer to grow a few years ago, along with COVID, is when sort of that gear shifted, and we became more of a mature industry where growth is going to happen in smaller chunks, both growth and loss. Since that point in the last couple of years, the National has been down. Also in the state of Oregon, we've lost, I believe, around 60 breweries in the last two years, which is pretty sad. There's a lot of negative impacts that are going on that are not just that are national as well as local. So from the tariff situation is just finally starting to hit. Most manufacturers were trying to buffer prices for as long as they could. And so those situations are changing. And so some of our cost of goods have certainly gone up, as well as the supply chain. We're just actually the whole West Coast has been working through a CO two shortage. Every year. The CO-2 companies redo some work on their facilities, and then one other one also closed down for a temporary time, that put a huge amount of stress, not just on our industry, but anyone that utilizes CO two on the west coast. So there's kind of a situation in which there's always a lot of hard work going on here that's sort of on the harder side of things. The thing that I would say about Oregon beer is it's some of the best in the country. We're really blessed to have ingredients grown here locally, including hops. It's been a long tradition for brewing, and Oregon breweries are also some of the most awarded in terms of national and international competitions. Oregon Brewers always prove to show their expertise. And then, you know, most importantly, we're local businesses. And so I think the most important thing for Oregon is an important time for Oregonians to choose Oregon products as much as they can, and all of the things that when people go and buy Oregon beer, all of that money is staying here in the state and goes to help support families that have, you know, real, meaningful wages as well as benefits and sort of that that's kind of the artisanal side. I know our friends in wine and cider and cheese, everyone is experiencing some of these harder times given some of the larger problems that are happening nationally as well.
Ziegler: So that's interesting. Actually, one of the things I had in my notes here to talk to you about is the proliferation of seltzers, can cocktails, the growth of things like cider and Mead, which really weren't as big in the picture 20 years ago. There's. Seeing some surge in popularity add to it. Even in a lot of states in the West, you now have canned THC beverages. Is the problem for the beer industry right now, just, man, all of a sudden, you guys got a lot of competition for people looking for a beverage?
Floyd: Yeah, I think you know, a lot, a lot of breweries make more than just beer at this point as well. So a lot of us have responded by actually producing more beverages than just beer. But beer is one of it, you know, is the earliest recipe in humankind and been around for a long time. So it's always managed to be able to bump trends and just sort of be there for humans. And I think that that's something that is always there. And one of the cool things about beer is its level of moderation and relative to a lot of other things out there. So, you know, I think for me as a sociologist, and I look out at the world right now, beer, its best job is bringing people together. And I think culturally, people are meeting less often together in groups and stuff. And so I think the competition for like, just having people come together as a group is really one of the main indicators there. When you look at things like the THC beverages have actually been around for a long time. Those get sold through dispensaries. The federal government just passed a law that probably is going to end a lot of THC, beverage manufacturing in the United States. So for my friends in other states whose businesses are supported by those productions, I don't know what's going to happen for them. So for some of these other stories of iconic breweries that we've heard about may also have some sort of terminal issues that happen because of their ability, whether they can sell those products or not. And then, you know, as you know, one of my friends, Brett at Sun River, has said over the time, so, you know, seltzer is there for folks, and people are choosing that for somewhat, but it doesn't really have a story like this one does, right? There's not a lot of soul involved with taking a spirit base and then, you know, doing that stuff. And we're happy to provide that for our customers that are there, but you don't see as many people telling stories or going out with much, you know, cultural benefit to that side of it. So we'll see how long those sorts of beverages stay in play.
Ziegler: Cool. Can we go see the main brewing since we kind of started off here?
Floyd: Yeah, we're fortunate enough here in the Whiteaker to have been able to find enough space within, you know, in the couple of blocks here, to be able to do all the operations that we have here. We're on our way now to the 220 plant that has our 90 barrel production facility, the one that we just saw was five barrels. So the one we just left makes 10 kegs at a time, and the one across the street makes 180 kegs worth of beer. We've seen a lot of breweries lose barrel age. Certainly, our brewery had lost barrel age after sort of the craft peak moment, but we've been able to rebuild through our partnerships as well, as you know, focusing on the beers that people really want and reacting to the way the market is, as well as doing some contract brewing. So we do take care of some other people's stuff as well. Who, where we're walking is much louder.
Ziegler: Yeah, there's, there's that smell you expect in a brewery.
Floyd: You know it. So in this room here, has some of our clarifying machinery. This is a centrifuge that spins all the stuff clear and makes all the yeast go away and makes a clearer and more stable product. We also have a blending skid over here that we use for our seltzers, as well as blending in other specialty ingredients that we might use for beer or cider or filter. Kind of look down this way, you can see these tanks here are 550 barrel fermenters, and so we'll be able to brew multiple batches in a day into one of these, or ferment cider in one of these. Here's where we produce most of the work. This side, as well as the other place, has fermentation and maturation tanks. And then we sort of split up the packaging on both sides.
Ziegler: And so before, we were standing near tanks that were maybe five, six feet tall. Now these guys are, are 20 feet at least
Floyd: 37
Ziegler: Okay, 37 feet up to that ceiling top there. You can tell I work with audio. I'm bad at judging things visually, it's a notable scale difference, absolutely, for that, that set that, like you'll see in like a micro brewery, what you had on the other side, versus here going to scale?
Floyd: You know, for us, I mean, ironically, we're relatively small as a brewery goes. We may be, you know, ranked in that. Top 30 of craft breweries in the nation, but we still are a relatively small batch brewery compared to some of the, you know, bigger brands, both craft and then, of course, national brands as well.
Ziegler: So what changes when you go to scale like this?
Floyd: Well, actually, if you're doing things right, not a lot other than the scale of things right. So for us, one of our best abilities is when we can take a beer we've been making on the larger scale and then recreate it again on the pilot system and have it taste the same. So I mean, ultimately, the goal is the same with the scale situation. You know, we're just able to utilize resources in a way that allows for us to be a little more efficient versus the much smaller size situation. So we do gain some stuff. Before we go to the brew deck, we'll do a quick pop into the analytical lab.
So as you can see in here, we actually have a full biological as well as chemistry set up here so that we can test beers to make sure that they are true to Bran and what we expect there to be. We also, like I mentioned before, propagate our own yeast on site. So we're kind of done for the week. You can see some yeast is kind of rolling around there. So we do both the analytical side of the of the testing here, and then, as I mentioned before, at the other building, we'll do sensory thankfully, AI will never replace a pallet, so we're the ones that actually drink beer, and that's the most important last sort of check for any of the things that we make.
Ziegler:
We're going to take a break. I'm Zac Ziegler, and you're listening to Oregon rainmakers from KLCC.
Ziegler: We're back. I'm Zac Ziegler, and you're listening to Oregon Rainmakers from KLCC. Our tour of Ninkasi Brewing Company with Co-Founder Jamie Floyd continues as we stop at a series of tanks with hot liquid inside.
Floyd: Alright, so you can see in here, this is an active boil. If you look inside, you can see the steam calandria. And so yeah. So there is 83 to 100 barrels worth of work in here, depending on the batch of beer that we're making.
Ziegler: And for folks who aren't necessarily familiar with the beer process, wort is.
Floyd: Wort is beer before yeast is added. So we take malted barley and mix it into the mash mixture over there, behind you, there once that creates a specific temperature that releases the sugars that we want. Some of the sugars are used to make alcohol. Others are there to create the body that makes beer balanced. Once that process has happened, it gets pushed over here into the louder ton that has screens underneath that. That's where we basically wash all of the sugars out of that. So we'll start the process of under letting that, removing the sugar that's in there, into this receiving tank that just allows for us to do another couple of batches of beer in a day to keep the cycles going through. Once that starts to move, we actually spray water on top, and that rinses all the rest of the sugars through. So it starts very strong, and then by the end, is very thin in terms of added sugar. To get the quantity we want, it goes into the receiving tank. That receiving tank on the way there, there's actually heat captured from the system that preheats that to just blow boil. So when it moves into this kettle here, doesn't take very long for it to start to actually come to a boil. The boil here is one of the most important aspects of it is absolutely sanitizing or cleaning the yeast by boiling it for a long period of time. Also, hops need isomerization, which means it actually needs the boiling process so that the oils and the useful elements that we love from hops actually stick to the beer. And then there's some other things that happen in terms of gelatinization of proteins and stuff that fall out that you don't want in the actual finished product. From there, it goes into a whirlpool. That Whirlpool actually helps take all those solids. And then with centrifugal force, drop out the extra hops, and as well as what we call true out of that. And then from there, it is chilled through a heat exchanger and then pitched into one of the fermenters that we were under.
Ziegler: You know, I always think of the fact that I'm fairly new to Oregon. I came from Arizona. I knew you guys for, you know, Tricera-hops, or some of the unique stuff, like Ground Control, yeah. Are there challenges in being known for, for being a producer of, like, hoppy beers? Because, man, that's when I think of Ninkasi, having been from out of state, my brain goes, Oh, yeah, that good hoppy stuff. Yeah?
Floyd: I mean, no matter the fact that we brewed loggers and Hellas and light loggers for most of the duration of our company, we're definitely known for hops. Daniel, who runs production here, has a PhD from Oregon State and hop chemistry, and I first went on hop farms in the mid 90s and stuff. And so we're both pretty big hop geeks, and we're part of the group called the hop quality group that's worked with the USDA to put out a new hop that's called Thora, that's just released, that's in our beer, XPA. So we're really excited to have that reputation. It does put a lot of pressure on us and and compared to a brewery that only makes like a Light lager or something, we have a lot more expense that goes into what we do, both in the terms of the amount of ingredients, alcohol content, you know, the difference between something that's four and a half percent and six or six and a half or 7% in alcohol content is that much more malt that it takes to create those things. So we have a lot of extra, you know, monetary pressure in terms of our margins and stuff. So we don't make as much money per barrel sometimes as other people do, but our customers are happy, which is the most important part, and then also, because of our nature, we're always going to be kind of playing with all the experimental stuff that's out there. Truthfully, for our industry, innovation is the most expensive part. In the old days, people were fine with having Tricera-hops or total domination only as a beer, and the younger consumers want more options, which you can see when you go to the grocery store, just how many different beverages there are compared to like when we were younger, there's all kinds of choice there, and that desire of new creates insane pressures on all of our businesses to stay innovative as well as maintain margin and cost. Yeah, we're up here, 37 feet above 550 barrel fermenter, looking down on our canning machine.
Ziegler: Looking around here, I'm seeing a lot of steel, a lot of aluminum. You mentioned earlier, tariffs are finally starting to catch up with the industry. What's the impact that that has on beer making today?
Floyd: It has a lot of impacts. The aluminum can situation, or aluminum as a whole, that all of that tariff association is really just starting to happen. A lot of people had contracts in place ahead of time, but as those contracts expire, they're not going to honor those prices, and in some points, have already changed those pricings based on their own personal demand and ability to supply, certainly manufacturers, some brewing manufacturing, given how old brewing is, it comes from Germany and other places internationally, access to those materials, of course, is skyrocketing. Quite a few Maltsters, places that we buy malt from are international, and even the US malt crop, most of the companies that grow barley in the United States also grow in Canada, so it's kind of an over connected situation there as well. And the same goes with hop. So most of the inputs do have some international ability, which is that way, fortunately for the United States, we do have a lot of it inside. What used to happen in brewing 1520, years ago is that most of the inputs for cost of goods in all our businesses are commodities, and they used to all go up and down at different times. So steel might be up, which usually if steel is up, energy is up, but then maybe other things, like malt or hops or things are down. And it used to create an environment of balance, where if something was up, other things were kind of giving you a break. Certainly, since COVID, we've only seen prices go up with really no downward pressure, regardless of normal business sort of trade.
Floyd: And I'll say, I'll say, real quick too, as far as the whole chain of events go, you know, we get malt deliveries that come into these silos that then go through the mill. We also have a spent grain silo, so the grains that we use get utilized and go to cattle farmers out in Pleasant Hill, which has been a great relationship for us the whole time. We do pH balance and pre-treat, not biologically, but chemically balance the wastewater here, before it goes to to EWEB, which is we utilize the same things that they utilize. So it's a cost savings for them, as well as for our community. One of the things that you know is been hard, especially on craft beer and Oregon beer is just that, especially within the media attention and sphere and stuff like that, most, most talking about anything related to the alcohol industry is fairly negative. And so there has been as much room for the positive storytelling that craft beer has been a part of. So most of us are deeply committed to our communities that are giving, even when our businesses are struggling, still try to be close to everybody there. And we think that's just an important hallmark of what makes craft beer in Oregon such a special thing. We just hope that consumers out there remember that we're here for the community still, and want to be so.
Ziegler: I mean, thinking about kind of those things that do catch the headline, the big news recently, rogue, kind of abruptly shutting down what goes through your brain with things like that.
Floyd: I mean, operating a craft brewery at any size is really challenging. I think that's the bottom line for it, and the bigger or more complex your business is, the harder it is to maintain stability and balance. A lot of the smaller breweries are able to sell a huge percentage of their products over their own bars, and make the maximum where we are doing a very small amount of our own sales versus everything else, and so that that, that's a major part. I mean, for me, personally, we've had a close relationship with rogue just, you know, John Meyer, the founding Brewer there was one of my mentors when I was a young Brewer and still a friend of mine. So yeah, those are, those are sad things to hear. Our friends at 21st Amendment in San Francisco, also just shuttered. That's a bigger brewery that was in that top situation. Sean worked at the same company as I did, steelhead, and have a very long connection the owners of that company and us, and they're an iconic Bay Area brewery, and even earlier this week, it was announced that the pike pub and market up in Seattle will shut at the end of the month. Fortunately, Fremont brewing will still brew those beers. It's a little bit different than, maybe say, these other two examples, and even Anchor closing here a few years ago, really hasn't found a way to get back. So it's really, the message should be out there. I really, unfortunately see the instability that that is in the larger total economy, not just in the brewing industry, really bearing down on some of some of some other regionals that may still happen. So we feel really fortunate that we're still having to be as efficient as we possibly can to compete in the situation that we're able to maybe someday regain the stability that many of us had many years ago, that none of us have had. But mostly there's a lot of, you know, just general sentimental sort of feelings about those beers that you had. I always like to say that, you know, the best beers you have are associated with the memories you have with it. So when you have these sort of iconic moments. You know, I went down to California for the last day that pub was open. We'd done a lot of collaboration brews in San Francisco at 21 a together, and, you know, I had a really positive day with that experience. But those are real emotions and stuff that we deal with. And the cool part is how passionate this industry is, and sort of how much awesomeness that it can create when these situations happen, you feel them?
Ziegler: Yeah, I can definitely imagine. And is there a challenge when, when you do start seeing the market shift in a certain way, when you are a brewery of scale, you know, when you start seeing product demand changing? Maybe the short lived craze for milkshake IPAs or whatever, if you start trying to scale up, I know you probably have what you're going to be brewing planned out for for months ahead. What are the challenges of trying to keep up in a nimble market when you are one of the big boys?
Floyd: Lots of other breweries, again, are much bigger. So some ways we are a lot more complex. In some ways we're less complex than some others. But you know, I think successful businesses, there's always a certain amount of luck involved. And Nikos and I recognized a very pre-COVID a very long time ago that things were going to change. Where we both recognize that new industries never remain new industries, and that you need to look at lessons of other mature and, you know, see what's coming. But we decided a long time ago that we needed to be more nimble, and started doing things like contract brewing as well as, you know, working on cider stuff and doing Seltzer and other things, and really focusing and building a team that is based on that nimbleness and quickness most human beings want to work really hard and then get to the top of the hill. And beer industry, craft beer industry, there's no settled moment. It's all an evolution. We're always changing. That's the kind of the beauty of beer, and beauty of humans is that beer is a biochemical sort of set of reactions, and there's a biology to it that forces it to change all the time. And really, business is the same way. So what I hope is that for most breweries of any size, that they are all more nimble than they probably were when they started and got their first business loan.
Ziegler: Well, thanks for taking the time out of your day to give me a tour and chat with me.
Floyd: Oh, it's my pleasure.
Ziegler: That was my conversation with Jamie Floyd of Ninkasi Brewing Company. This has been Oregon rainmakers from KLCC. I'm your host. Zac Ziegler, thanks for listening.
